INSURERS

The number of vehicles that have received the Insurance Institute for Highway Safety’s (IIHS) two top safety awards has surged from 39 in 2014 to 71 in 2015. For the third consecutive year the IIHS raised the crash and safety testing bar for car manufacturers and quite a few companies have met that challenge by responding in kind. The IIHS is funded by numerous insurance companies and organizations — thus, its crash test scores can have a bearing on your insurance rates.

“This is the third year in a row that we are giving automakers a tougher challenge to meet,” says IIHS President Adrian Lund. “The quest for TOP SAFETY PICK and TOP SAFETY PICK+ awards is driving improvement in the small overlap front crash test and getting manufacturers to offer automatic braking technology on more and more vehicles.”

Eleven More Winners

For 2015, the IIHS tightened its safety testing criteria for its TOP SAFETY PICK+ award, while maintaining its requirements for the standard TOP SAFETY PICK honor. Despite the more rigorous stipulation for its top criteria award, the IIHS added 11 more vehicles to its top list. The top performers are now required to have a front crash prevention system that earns an advanced or superior rating instead of the previous basic rating.

Specifically, TOP SAFETY PICK+ awarded vehicles are now equipped with an autobrake system that slows down or stops the vehicle at speeds of 12 mph, 25 mph or both without driver intervention.

“Although forward collision warning on its own is a valuable feature, we decided to tighten our criteria to encourage manufacturers to offer autobrake. Systems that don’t require a driver response to avoid or mitigate a crash have the most potential for reducing crashes,” stated Lund. However, for 2015 some 2014 TOP SAFETY PICK+ winners have lost their plus signs, yet still finished as TOP SAFETY PICK winners.

Both awards criteria are coveted by manufacturers and may be used for advertising purposes. For 2015, 33 models are TOP SAFETY PICK+ winners and another 38 garnered the Institute’s TOP SAFETY PICK award.

Crash Test Categories

The IIHS tests vehicles in several categories to include: head restraint, roof strength, side impact crashes as well as a “moderate overlap front” test. New since 2012 is a “small overlap front” test that has proven to be a much stiffer challenge for manufacturers to satisfy. Notably, that test simulates what takes place when the front corner of a vehicle strikes another vehicle or an object such as a tree or a utility pole.

The Institute acknowledges that the new testing criteria is a difficult one because the crash force sidesteps most of a vehicle’s energy-absorbing structure. Yet, the IIHS says that small overlap crashes are common in actuality, therefore the Institute has been pushing car manufacturers to “look for solutions.”

Honda and Toyota Improvements

Honda is one manufacturer that has successfully found a solution for one of its models, namely its popular CR-V compact utility vehicle. When first tested for the new criteria in 2012, it received a marginal score. As a result of this lower score, Honda’s engineers modified the vehicle’s structure to coincide with the release of its all-new, 2015 edition. The latest test showed a reduction in intrusion from the previous one foot to five inches. More importantly, the test dummy’s head remained on the front airbag until it rebounded. In the earlier test the dummy’s head barely made contact with the airbag before sliding off as the steering column shifted to the right.

Toyota is another manufacturer that successfully improved one of its models. In an earlier test of the Prius V, the Institute said that this vehicle was “one of the worst performers ever in the small overlap test.” Whereas the earlier test recorded much intrusion and significant “injuries” to the dummy, the 2015 model showed a sharp improvement. Toyota made changes to the vehicle’s structure and also lengthened the side curtain airbag.

In the end, the driver and vehicle occupants are the winners when car manufacturers make the Institute’s recommended changes. Manufacturers can contain these costs by incorporating engineering changes as either revised or all-new models are brought to the market.

For a list of current qualifiers, visit the this page on the IIHS website.

Every consumer has a credit score, a three-digit number that is based on your credit history and behavior. That number can have a profound impact on the way that you live as mortgages, personal loans and even apartments and a new job may depend on your score. The higher your credit score, the more likely creditors, landlords and hiring personnel will view you more favorably.

Insurance Score

Your claim history affects your insurance score.The insurance industry values your credit score too, but it is only part of a larger or more comprehensive measuring tool. That tool is your insurance score, a number that few people outside of the insurance industry are aware of.

The Insurance Information Institute describes an insurance score as “a numerical ranking based on a person’s credit history.” These scores help insurers assess risk and are also considered “a good predictor of insurance claims.”

An insurance score is based on actuarial studies that indicate whether a person is more likely to file a claim or not. Consumers with a lower insurance score are more likely to file a claim and will, therefore, be charged higher premiums.

Credit Bureaus

As you might guess there is a parallel between credit scores and insurance scores. The former is used to predict credit delinquency, the latter is for predicting insurance losses. Both scoring methods are based on information gleaned from your three credit reports, data that is collected by the three credit reporting bureaus: Experian, Equifax and TransUnion.

One problem here is that some consumers may have very little credit, choosing to pay cash for their purchases. Employing wise money management may cost you financially as a lower credit score can result in higher auto and homeowners premiums, with no consideration given to what your earn. This isn’t fair, of course, but we do live in a world of credit.

Insurance Scores

Just as credit scores serve up a three-digit number, your insurance score does the same thing. That scoring range extends from 200 to 997, with 776 on up representing a good score. Scores of 500 or below put you in the poor score range with both your car insurance and your homeowners insurance premiums most likely coming in double reports the New York Times.

Insurers have another way of calculating risk. Two databases contain claim information: the Comprehensive Loss Underwriting Exchange (CLUE) and the Automated Property Loss Underwriting System (A-PLUS). Anything that insurers want to know about your claim history can be easily found.

Reporting Errors

With your credit reports playing such a significant role in determining two very important scores, the information found in each report should be correct, right? Unfortunately, facts tell us otherwise.

The Federal Trade Commission in a December 2012 report to Congress found that 26 percent of the 1,001 participants in an FTC study reported finding errors in at least one of their credit reports. These consumers reviewed 2,968 credit reports with 19 percent or 572 reports disputed.

Of the reports disputed, 399 had a modification made by the respective credit reporting bureau with 195 consumers reporting a credit score increase following the adjustment. Of the 195, two thirds reported an increase of 10 points or more — what might seem like a small number, but one that could have far reaching consequences for some insurance shopping consumers.

Reports and Scores

By law, consumers are entitled to receive one free copy of each credit report annually. Your free reports are available at AnnualCreditReport.com, a website that was set up by TransUnion, Equifax and Experian. Obtain copies of all three reports and if errors are found, following the reporting bureau’s instructions on how to file a dispute.

You can also obtain your credit score for a fee. A visit to MyFico.com will give you that score.

What about your insurance score? Is that information available to consumers too? Yes it it is. If you visit the Lexis Nexis site, you can obtain separate home insurance and auto insurance scores. Moreover, you can also obtain free CLUE reports that offer a seven-year history of the losses associated with your personal property or automobiles.